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Week of August 7 |
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Friday, August 11, 2006
1001 Ways to Invest $1000
We occasionally get questions from women wanting to know how to
invest $1000 dollars. They’ve gotten a bonus or refund or gift and
the money is getting itchy in their hands.
There are probably 1001 ways to invest a
thousand bucks, and even more ways to blow them. The simplest answer
to that question, assuming you don’t have a lot of credit-card or
college debt hanging over your head (in which case you should use
the money to pay it down), is to plunk the money in a mutual fund:
you’ll earn higher interest than you would with a CD and buying
shares in a mutual fund is far less risky than going solo, picking
your stocks one by one on the open market.
Finally, there really are 1001 (or more)
funds to choose from. Somewhere there’s bound to be a fund that fits
your interests, political or social beliefs, and financial needs. A
relatively new approach is something called “life cycle” funds that
take into account and adjust for your age, reducing risk exposure as
you grow older. If you haven’t already maxed out your tax-advantaged
options, depending on your income level, think IRA. You can find an
IRA that invests in mutual funds, and the money you stash there
won’t be taxed until you take it out years from now. Visit
www.investorguide.com or
www.morningstar.com to start exploring your options. The next
step, once you’ve made your choice, is to set up an automatic
dividend reinvestment option so that whatever you earn gets put back
into the fund to buy more shares.
Closing thoughts for the week: My local news station of choice
has taken to reporting what gas is going for per gallon in the
region, at the same time that it tracks the ups and downs of the
NASDAQ and the Dow. I hope I’m not being prescient when I speculate
whether someday we’ll see the same sort of news coverage tracking
the price of a loaf of bread or a gallon of milk. All sorts of
things, from war to pestilence, trade agreements to global warming,
can impact the price we pay for stuff at the corner grocery. Here’s
hoping we do what we can to control the things we can for the good
of us all before it’s too late.
Prosper & enjoy,
Gail Harlow |
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Thursday, August 10, 2006
Baby Talk & a Travel Tool to Go
There’s something oddly comforting in the fact that our Government,
busy keeping track of terrorists and tax cheats, also tracks the
1000 most popular baby names by birth year. I have just become the
aunt of a future CEO named Daisy. Betraying my English major roots,
in my mind, the name conjures up images of the pampered heroine of
F. Scott Fitzgerald’s “The Great Gatsby.” The inspiration for
Daisy’s Gen Y parents was more likely Jessica Simpson’s “Daisy
Dukes” jeans. My hope for Daisy is that she becomes financially
independent enough to wear whatever she wants.
Turns out that babies need more than a name; they need a number,
too. The Social Security Administration, which is the keeper of the
list of “Popular
Baby Names”
(Jacob and Emily topped the list in 2005—will Suri climb the charts
this year?), urges parents to get a Social Security number for their
babies at birth. The easiest time to do it is at the hospital when
you supply information for your child’s birth certificate. Waiting
until later makes the process more complicated and time-consuming.
CLICK
HERE for more information from Uncle Sam on the how’s and
why’s of applying for an SSA number for the baby you’ve just spent
months naming. Unlike your child’s name, his or her number will be
unique.
DON’T LEAVE HOME WITHOUT IT DEPT.: The folks who produce those
useful hotel and restaurant guides for cities around the world,
www.Zagat.com, now allow you to access their constantly updated
ratings and reviews on your mobile phone or PDA. It’s called
Zagat to Go, and includes
a list of the top 1000 movies of all time, top bars, clubs and
lounges by location, and, for Tiger Woods groupies, the top golf
courses in the U.S. The service costs $24.94 per year. If you travel
a lot, that’s probably money well spent.
Prosper & enjoy,
Gail Harlow |
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Wednesday, August 9, 2006
4 ‘Good Things’ to Be Grateful for
1. The Federal Reserve Board met yesterday, and, for the first
time in two years, after 17 straight rate hikes, it chose not
to raise the interest rate by which banks and other financial
institutions set the rates they charge borrowers. Those of us who
have Adjustable Rate Mortgages and variable-rate credit-card debt
can breath an uneasy sigh of relief.
2. Despite the nearly full shut
down of BP’s Prudhoe Bay oil fields while underground pipes are
repaired, so far at least, gas prices haven’t risen and, barring
further unforeseen circumstances, some experts predict that they
won’t cross the dreaded $4 threshold in the U.S. any time soon.
3. Martha Stewart bid adieu to the largest remaining legal
entanglement arising from her untimely sale of Imclone stock five
years ago, settling the civil suit brought against her for a mere
$195,000. As part of the agreement, she also has been barred from
presiding as CEO of any public company, including her own, for five
years. Masquerading behind that “hostess with the mostest” exterior
is a savvy businesswoman (she really should start a women’s finance
magazine). We suspect she’ll find innovative ways to continue to
attract new fans to her “table”—CEO or not. Her stock closed up 7
cents, at $16.95 yesterday.
4. The return of tried-and-true fashions for fall is something
definitely worth cheering. Plaid jackets and little black dresses
are back in style. Pull one from the back of your closet and you
won’t have to go on a shopping spree next month.
In the ‘What Was She Thinking?’ Dept.: a female banker based in
Hong Kong reportedly made an upfront payment of $8 million to
two ballroom dance instructors for eight years of Latin dance
classes. After reconsidering her mad hot ballroom compulsion, she is
suing them for the return of her prepayment. They probably
quick-stepped all the way to some Swiss bank with it long ago.
Prosper & enjoy,
Gail Harlow |
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Tuesday, August 8, 2006
It’s Not Monopoly Money
True confession:
I own 15 shares of Microsoft stock, a holdover from a time when I
actively traded, in a dilettante sort of way, using
www.Etrade.com. I only invested a couple of thousand dollars in
the market, outside of my 401(k), back then. It was fun, analyzing
company prospects, playing my hunches, buying in, trading out,
making a little here, losing a little there. Even when I lost, I
didn’t mind. I felt like I was playing a giant online game of
Monopoly. What I was doing was just that: “playing” the market. To
increase your chances of winning in the stock market, you have to
take a position and hold it. Profits are made by hanging in over the
long term, and women tend to be better at that than men.
On
Saturday, I received a tender offer in the mail to sell my “huge
position” back to the company at a small profit. I’ve decided to
hold onto those 15 shares. As much of a behemoth as it is, I figure
Microsoft still has some growing to do, and that includes its stock
price. But in the process of making my decision, I visited E-Trade’s
site again, and I discovered that they’ve just introduced a cool new
tool.
E-Trade’s “Risk Analyzer” allows you to “evaluate the potential risk
and rewards of your investment choices.” Using it, you can judge how
well your investment strategies match your financial goals. It lets
you play “what if” scenarios, to learn what happens to your risk
exposure when you add or subtract certain stocks. You can also test
your portfolio’s security against “worst case scenarios” (like,
maybe, a Third World War?) and measure how well you’re doing
compared with popular market indexes.
Sounds like a neat game, doesn’t it? Try playing it, when you have
a minute. Just remember, if you end up opening an account at E-trade
or any of the other online brokerages, you’re not risking Monopoly
money.
Prosper & enjoy,
Gail Harlow |
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Monday, August 7, 2006
New (Financial) Front in the Battle
of the Sexes?
The New York Times has been running an insightful series called
“The New Gender Divide,” which examines “what has happened to men
and women several decades after the women’s movement began.”
Previous articles looked at women’s performance in college compared
with men’s (we leave them “in the dust,” of course), and men laid
off and “not wanting just any job.”
In
Sunday’s Times, as part of this ongoing series, there was a
fascinating glimpse into the reasons why some men are postponing
marriage indefinitely. The authors of
“Facing Middle Age with No Degree, and No Wife” point out
that these men’s commitment issues have as much to do with their
inability to earn big money as their reluctance to be tied down to
one woman. While, in general, fewer Americans are marrying, the
decline, says The Times, “is most pronounced among men
with less education . . . and can be traced to the greater economic
independence of women and the greater acceptance of couples living
together outside of marriage.”
Last
Friday, I wrote about the need for a woman to protect herself when
entering into a cohabitation arrangement outside the legal
protections of marriage. This article points out that the tax code
of this country, which pays such loud lip service to “family
values,” penalizes men and women in the lower tax brackets when they
decide to marry. Pushed into a higher bracket after marriage, many
formerly single moms end up with a greatly reduced earned income tax
credit. It’s just another example of why women need to educate
themselves about their rights and the consequences of every
financial move they make.
About Face Dept.:
Singer Ashlee Simpson graced the cover of Marie Claire
magazine in July, and, in the accompanying article, she talked about
loving her body just the way it is. And then she got a nose job.
Prosper & enjoy,
Gail Harlow |
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If you like the blog, you’ll love the book.
For more savvy
finance advice, buy
“Making Bread: The
Ultimate Financial Guide for Women Who Need Dough,”
by Gail Harlow and Elizabeth Lewin, available on
Amazon.com and at your local bookstore |
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